The blast destroyed the facade of the three-storey building, and was the deadliest single attack in the country in three months, according to Iraqi officials.

In apparent retaliation, a mortar shell hit close to Iraq's main office for Sunni Muslim religious affairs in northeastern Baghdad later on Monday, but caused no damage or injuries.

Violence has dropped sharply in Iraq in recent years, but attacks on government offices and members of the security forces, aimed at undermining the Shia-led ruling coalition, are still common.

Political paralysis

Monday's explosion came at a time of a prolonged political paralysis caused by sectarian tensions.

Nouri al-Maliki, the prime minister, issued a statement regarding the attack, which said: "We strongly condemn the cowardly terrorist attack ... and confirm that these ugly crimes will fail in planting sectarian sedition between Iraqi people ... the terrorist attack that targeted the Sunni Endowment later today is proof that there is one side that is trying to ignite sedition."

Monday's attack was the deadliest in Iraq since March 5, when assailants waving the battle flag of al-Qaeda killed 25 policemen in the western Iraqi town of Haditha.

Last week a string of bombings killed 17 people in Baghdad and one in the northern town of Mosul.

The violence is adding to Iraq's sense of instability. Maliki's unity government has been largely paralysed since the withdrawal of the US troops in December.

There is mounting criticism of al-Maliki within the ruling coalition over complaints that he is shutting out Iraq's two main minorities - Kurds and Sunni Muslims - in decision-making.

However, his opponents appear to fall short of a needed majority in parliament to bring down him down.

Violence in Iraq has declined, but Sunni armed groups tied to al-Qaeda are still potent. They often attack Shia targets to try to stir up the kind of sectarian tensions that pushed the country close to civil war in 2006-2007.